The Free Lunch Campaign: A Lost Opportunity

The Origins of the Ownership Society: How The Defined Contribution Paradigm Changed America

By Edward Zelinsky

The United States is in the midst of a “free lunch” campaign in which Republicans and Democrats alike promise painless resolution of our budgetary problems. As a result, neither party will have an electoral mandate for the hard choices necessary to tackle our fiscal quandaries. Both parties are squandering an important opportunity to mold public opinion and set the stage for meaningful budgetary discipline.

This conclusion should surprise no one. The history and current reality are there for all to see: In 2001 and 2003, the Bush Administration and Congress reduced federal income taxes significantly. Instead of decreasing federal spending to pay for these tax reductions, the Bush Administration presided over significant increases of military and domestic outlays as well as unrestrained growth of so-called “entitlement” spending – Social Security, Medicare, Medicaid. The Obama Administration has continued and exacerbated this trend. At the state and local levels of government, budgetary prospects often even worse as unfunded pension obligations and unfinanced retiree health benefits balloon.

To be sure, there is much contemporary political rhetoric about the need for fiscal discipline. President Obama has appointed a National Commission on Fiscal Responsibility and Reform. Tea Party candidates successfully exploit growing public anxiety about budgetary deficits.

However, none of this should be taken too seriously. President Obama’s deficit commission is scheduled to report only after this November’s elections. We have become inured to public images of Tea Party activists denouncing federal spending – except for their own Social Security and Medicare payments. The House Republicans’ “Pledge to America” promises fiscal responsibility while also refusing to reduce defense spending or spending which affects seniors.

The net result has been a free lunch campaign in which Democrats and Republicans alike promise budgetary discipline but refuse to specify how they will achieve it. The bi-partisan message to the electorate is that public deficits can be controlled without pain.

This, of course, is untrue.

Undoubtedly, it is considered wise politics to promise tax reductions and vague spending restraints while ignoring the tough choices necessary to put our budgetary house in order. However, in the long run, the promise of a free lunch will prove to be poor politics.

Empty, anodyne campaigns result in elections without mandates. Postponing the real discussion until after the election forfeits the opportunity to establish an electoral basis for the painful actions necessary to eliminate federal and state budget deficits.

In ordinary times, off-year elections are low key affairs in which the President’s party typically loses some or all of the congressional seats it gained in the prior presidential election. Conventionally, such off-year elections are preceded by locally-oriented campaigns.

However, these are not ordinary times. We are barely recovering from the worst economic contraction since the Great Depression of the 1930s and confront current and projected budgetary deficits of unprecedented magnitude. In this historically unique setting, the 2010 campaign is an opportunity for the two parties to form electoral mandates by specifying how they will tackle the nation’s budgetary shortfalls.

The fiscal irresponsibility which has gotten us to this point has been bi-partisan. Similarly bi-partisan has been the determination to conduct a free lunch campaign this year. In the short run, this strategy will work for one of the parties. For the long run, this approach will work for neither party nor the nation.